Clauses of the Memorandum of Association

States the name by which the company will be known. A public company's name must end with the word "Limited", and a private company's name with the words "Private Limited" — except for companies registered under Section 8 for charitable or not-for-profit objects, which are exempt from adding either suffix. The proposed name must not be identical with, or too closely resemble, the name of an existing co …

States the State in which the company's registered office is situated. This fixes which Registrar of Companies has jurisdiction over the company and, in effect, which High Court will deal with matters concerning it. The exact address within that State must be communicated to the Registrar within thirty days of incorporation, a …

The most important clause in the Memorandum. It states the objects for which the company is formed — the business or businesses it is permitted to carry on — usually distinguishing the main objects from matters that are merely incidental or necessary to achieving them. The company can lawfully engage only in what this clause permits; anything beyond it is void under the doctrine of ultra vires. Because altering this clause later needs a special resolution of the members, promoters are generally advised t …

States the nature and extent of the members' liability. In most companies, liability is limited by shares — a member's liability is restricted to any amount that remains unpaid on the shares registered in his name, and once the shares are fully paid up, he cannot be called upon to contribute anything further. A company limited by guarantee instead states a fixed amount each member undertakes to contribute only if the company is wound up; a small minority of comp …

States the amount of share capital with which the company proposes to be registered (its authorised or nominal capital) and how that capital is divided into shares of a fixed denomination — for example, into equity shares of Rs. 10 each. A company cannot issue shares beyond the limit fixed by this clause without first …

The concluding clause, in which the persons subscribing to the Memorandum declare that they desire to form a company in pursuance of it and agree to take the number of shares mentioned opposite their names, at least one share each. A public company needs a minimum of seven subscribers and a private company a minimum of two (a single subscriber suffices for a One Person Company). Each subscriber signs the Memorandum in the presence of a …